1. XYZ is planning a S5 million expansion to its New Richmond store. This expansion will be financed, in part, with debt costing 8.00% before taxes. XYZ's marginal tax rate is 35%. XYZ's common stock pavs a dividend of $1.20 per share. The current market price is $13.15 per share. XYZ's common stock dividends are expected to increase at an annual rate of 4.00% in the foreseeable future. Preferred stock pays a dividend of $1.00 per share and its current price is $12.00. The project is expected to yield an internal rate of retum of 8.57%. XYZ's target capital structure is as follows Assets Liabilities Current Assets$40 Fixed Assets $25 85 Current Liabilities Long-Term debt + Owner's Equit Preferred Stock Common Stock+Retained Earn. 140 15 55 Total Assets $180 Total Liability + Equity $180 a. Calculate the weighted average cost of capital for XYZ. WAAC- b. Should XYZ accept the project? Why